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DocuSign on New York's S2373A and How it Affects REALTORS

September 28 2011

This is big! NY now has a digital signature law on the books, leaving Illinois and Washington as the only states that do not have a specific electronic signature law. In those states, an electronic signature is not, in and of itself, a reason to nullify a contract - so they are still permitted under state law, but they do not have a specific law authorizing digital signatures in those states like the other 48. Here's the news from the DocuSign blog.

The ongoing debate about the legal standing of electronic signatures on real estate contracts in New York is about to be put to rest. Last Friday Governor Cuomo signed S2373A into law, authorizing recording officers to accept conveyance of real property presented for recording as electronic records.

What does this mean for real estate transactions in New York? Well, the New York Association of REALTORS has long held to the notion that electronic signatures on real estate contracts are prohibited by statute. That position has been controversial (see http://www.docusign.com/content/electronic-signature-legal-new-york) and has been refuted on legal and constitutional grounds. Nevertheless, the NYAR holds great sway with its members and its unwavering policy on the issue has put electronic real estate transactions on ice for the last decade.

The sole argument that NYAR relied on for its position was the obscure provision in New York’s Electronic Signature and Records Act (NYESRA), which stated that the act’s provisions (acknowledging the validity and enforceability of electronically signed records) did not apply to “recordable instruments”. Because real estate contracts CAN be recorded, the argument went, the NYESRA did not apply to them. Further, the resulting inapplicability of the statute to the contract meant that the contracts would be void.

So, the amendments that were signed into law on Friday effectively adopt the enabling language of the NYESRA, allowing for the recordation of electronic documents. The law, which was vociferously supported by NYAR, effectively removes the perceived barrier to electronically signing real estate contracts.

DocuSign and NYAR have been on opposite sides of this debate for many months. However, it is clear that NYAR has had the interests of its constituents in mind throughout this public discourse, and that they have always been courteous and respectful of differing opinions. In the end we were both aligned behind this bill and are equally happy with its passage.

View the original post on DocuSign.com.